Adelphia Plum Dangles Before Hungry Rivals

Comcast (CMCSA) and Time Warner (TWX) have taken a small step toward going their separate ways. But it could be only a matter of time before their paths cross again.

On Monday, the two cable TV giants announced an agreement that gives Comcast, the nation's largest operator of cable systems, the option to reduce its 21% stake in Time Warner Cable, the nation's second largest operator.

In addition, the deal puts on hold something that Comcast first asked Time Warner to do last December: register Comcast's shares in Time Warner Cable for a public offering of common stock.

By holding off on an IPO request until next April at the latest, Comcast appears to increase the odds of a scenario that analysts have been discussing since at least July: that Comcast's departure from Time Warner Cable will somehow be linked to Time Warner's acquisition of at least part of Adelphia Communications, the bankrupt cable operator that has put itself up for auction.

"Today's announcement is another example of our working closely with Comcast to reach a mutually beneficial outcome to the business matters facing our companies," Time Warner CEO Dick Parsons said in a statement. The registration delay, he said, provides "the two of us time to explore alternative approaches to facilitating Comcast's exit from its ownership position in Time Warner Cable."

Meanwhile, the companies said they are "exploring" the prospect of a joint bid for Adelphia. Spokespeople at both Time Warner and Comcast declined Monday morning to comment on the Adelphia sales process. Later in the day, however, Reuters and the Financial Times reported that Comcast and Time Warner, respectively, had acknowledged the companies were working together on a bid.

Time Warner's shares fell 23 cents Monday to trade at $16.27, while Comcast's stock fell 20 cents to $27.94.

Under Monday's agreement, Comcast -- which has a 21% stake in Time Warner Cable -- has an option to sell a 4% stake in the business to Time Warner in return for cable systems serving about 90,000 subscribers and $750 million in cash.